published in: Applied Economics Quarterly Supplement, 2004, 55, 83-112
Over the last year the German government has introduced a comprehensive set of labor
market policy reforms, the so-called Hartz reforms, which aim at a significant reduction of
unemployment. To this end, (a) many of the existing instruments of active labor market policy
are modified considerably, (b) a set of new instruments is introduced, and (c) the
administrative framework in which these measures operate is changed substantially. In order
to be able to judge the success of these measures by the end of the current legislative period
in mid-2006, the government has asked academic experts to set up an evaluation concept
capable of generating reliable empirical evidence by that date. The task is therefore to
develop a ready-to-implement concept for the evaluation of the full set of reforms in their
entirety, as well as each instrument on its own, facing substantive constraints regarding data
availability and a short time horizon. This paper presents such a concept. We discuss
essential guidelines for an ideal evaluation design, conceptual and practical difficulties that
arise in the context of evaluating the Hartz reforms, and ways to overcome these obstacles.
After detailing the three main analytical steps – analyses of effectiveness, efficiency, and
implementation and process analysis – we present the concrete evaluation design, specific
methods applicable to particular instruments, and a sampling scheme for collecting the
required data. In addition to the fact that our concept is directly implementable, it also has the
advantage of being extensible for future labor market policy evaluations.
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